|Office of the Attorney General - State of Texas
June 17, 1999
Mr. Paul Sarahan
Dear Mr. Sarahan:
You ask whether certain information is subject to required public disclosure under the Texas Public Information Act, chapter 552 of the Government Code. Your request was assigned ID# 124873.
The Texas Natural Resource Conservation Commission (the "commission") received requests for documents relating to ASARCO and its subsidiary, Encycle Texas, Incorporated ("Encycle"). You state that you have released the public information in your files. You claim, however, that the submitted documents are excepted from disclosure under sections 552.103, 552.107, 552.110, and 552.111 of the Government Code. We have considered the exceptions you claim and have reviewed the submitted information.
Initially, you argue that much of the submitted information is excepted from disclosure under section 552.103. Section 552.103(a), the "litigation exception," excepts from disclosure information relating to litigation to which the state is or may be a party. The commission has the burden of providing relevant facts and documents to show that the section 552.103(a) exception is applicable in a particular situation. The test for meeting this burden is a showing that (1) litigation is pending or reasonably anticipated, and (2) the information at issue is related to that litigation. University of Tex. Law Sch. v. Texas Legal Found., 958 S.W.2d 479, 481 (Tex. App.--Austin 1997, no pet.); Heard v. Houston Post Co., 684 S.W.2d 210, 212 (Tex. App.--Houston [1st Dist.] 1984, writ ref'd n.r.e.); Open Records Decision No. 551 at 4 (1990). The commission must meet both prongs of this test for information to be excepted under section 552.103(a).
You state that the commission is currently engaged in settlement negotiations with Encycle. You also state that if attempts to negotiate a settlement offer with Encycle fail, the commission will enter into litigation with Encycle. We have reviewed the documents for which the commission has asserted section 552.103(a), and agree that these documents are related to the anticipated settlement or litigation and may be withheld.
We note, however, that when the opposing party in the litigation has seen or had access to any of the information in these records, there is no justification for withholding that information from the requestor pursuant to section 552.103(a). Open Records Decision Nos. 349 (1982), 320 (1982). Thus, information that has either been obtained from or provided to the opposing party in the anticipated litigation is not excepted from disclosure under section 552.103(a), and it must be disclosed. In addition, the applicability of section 552.103(a) ends once the litigation has been concluded. Attorney General Opinion MW-575 (1982); Open Records Decision No. 350 (1982).
You also argue that some of the submitted information may be withheld under section 552.107(1). Section 552.107(1) excepts information that an attorney cannot disclose because of a duty to his client. In Open Records Decision No. 574 (1990), this office concluded that section 552.107 excepts from public disclosure only "privileged information," that is, information that reflects either confidential communications from the client to the attorney or the attorney's legal advice or opinions; it does not apply to all client information held by a governmental body's attorney. Id. at 5. When communications from attorney to client do not reveal the client's communications to the attorney, section 552.107 protects them only to the extent that such communications reveal the attorney's legal opinion or advice. Id. at 3. In addition, basically factual communications from attorney to client, or between attorneys representing the client, are not protected. Id. We conclude that most of the information at issue contains client confidences, attorney advice, and opinion. Therefore, the commission may withhold this information from public disclosure pursuant to section 552.107(1). We have marked the information that must be released.
Next, you argue that some of the submitted information is excepted from disclosure under section 552.111. Section 552.111 excepts from disclosure "an interagency or intraagency memorandum or letter that would not be available by law to a party in litigation with the agency." In Open Records Decision No. 615 (1993), this office reexamined the predecessor to the section 552.111 exception in light of the decision in Texas Dep't of Pub. Safety v. Gilbreath, 842 S.W.2d 408 (Tex. App.--Austin 1992, no writ), and held that section 552.111 excepts only those internal communications consisting of advice, recommendations, opinions, and other material reflecting the policymaking processes of the governmental body. Open Records Decision No. 615 at 5-6 (1993). Section 552.111 does not except from disclosure purely factual information that is severable from the opinion portion of internal memoranda. Open Records Decision No. 559 (1990). We have reviewed the documents at issue and agree that the information you have marked may be withheld pursuant to section 552.111 of the Government Code.
You also contend that some of the documents in Attachment C may be withheld as attorney work product under section 552.111. A governmental body may withhold attorney work product from disclosure if it demonstrates that the material was 1) created for trial or in anticipation of civil litigation, and 2) consists of or tends to reveal an attorney's mental processes, conclusions and legal theories. Open Records Decision No. 647 (1996). The first prong of the work product test, which requires a governmental body to show that the information at issue was created in anticipation of litigation, has two parts. A governmental body must demonstrate that 1) a reasonable person would have concluded from the totality of the circumstances surrounding the investigation that there was a substantial chance that litigation would ensue, and 2) the party resisting discovery believed in good faith that there was a substantial chance that litigation would ensue and conducted the investigation for the purpose of preparing for such litigation. Id. at 3-4. The second prong of the work product test requires the governmental body to show that the documents at issue tend to reveal the attorney's mental processes, conclusions and legal theories. Id. at 4. Having reviewed the information and your arguments, we conclude that most of the information at issue may be withheld as protected work product. We have marked for release a document that is merely factual and does not appear to reveal an attorney's mental processes, conclusions, strategies, or legal theories. See Occidental Chemical Corp. v. Banales, 907 S.W.2d 488, 490 (Tex. 1995).
Finally, the commission asserts that some of the requested documents are confidential under section 552.110 of the Government Code. Since the property rights of third parties may be implicated by the release of the requested information, this office notified ASARCO and Encycle about the request. See Gov't Code § 552.305 (permitting interested third party to submit to attorney general reasons why requested information should not be released); Open Records Decision No. 542 (1990) (determining that statutory predecessor to Gov't Code § 552.305 permits governmental body to rely on interested third party to raise and explain applicability of exception in Public Information Act in certain circumstances).
Encycle, on its own behalf and on behalf of its parent corporation, ASARCO, responded to our notification by arguing that Document 1, Electrowinning Cell Emissions Calculations, and Document 2, Estimation of Possible Scrubber Discharge Gases for Pilot Plant Scrubber, must be withheld as trade secrets of the corporation.(1) Section 552.110 protects the property interests of private parties by excepting from disclosure two types of information: (1) trade secrets, and (2) commercial or financial information obtained from a person and privileged or confidential by statute or judicial decision.
In Open Records Decision No. 652 (1997), this office concluded that section 382.041 of the Health and Safety Code protects information submitted to the commission if a prima facie case is established that the information is a trade secret under the definition set forth in the Restatement of Torts, and if the information was identified as confidential by the submitting party when it was submitted to the commission.
According to the Restatement of Torts, section 757, a "trade secret"
may consist of any formula, pattern, device or compilation of information which is used in one's business, and which gives him an opportunity to obtain an advantage over competitors who do not know or use it. It may be a formula for a chemical compound, a process of manufacturing, treating or preserving materials, a pattern for a machine or other device, or a list of customers. It differs from other secret information in a business . . . in that it is not simply information as to a single or ephemeral event in the conduct of the business . . . . A trade secret is a process or device for continuous use in the operation of the business. . . . [It may] relate to the sale of goods or to other operations in the business, such as a code for determining discounts, rebates or other concessions in a price list or catalogue, or a list of specialized customers, or a method of bookkeeping or other office management. [Emphasis added].
Restatement of Torts § 757 cmt. b (1939)(2); see Hyde Corp. v. Huffines, 314 S.W.2d 763, 776 (Tex.), cert. denied, 358 U.S. 898 (1958). After examining the arguments and the submitted documents, we conclude that Encycle and ASARCO have established that these documents must be withheld from disclosure as trade secrets.
We are resolving this matter with an informal letter ruling rather than with a published open records decision. This ruling is limited to the particular records at issue under the facts presented to us in this request and should not be relied on as a previous determination regarding any other records. If you have any questions regarding this ruling, please contact our office.
June B. Harden
Ref.: ID# 124873
Encl. Marked documents
cc: Ms. Kelly Haragan
Mr. Mike Davis
1. The commission submitted other confidential documents for our review. However, according to its brief, Encycle does not seek to withhold these documents under section 552.110. Therefore, the commission must release these documents to the requestor.
2. The six factors that the Restatement gives as indicia of whether information constitutes a trade secret are: "(1) the extent to which the information is known outside of [the company]; (2) the extent to which it is known by employees and other involved in [the company's] business; (3) the extent of measures taken by [the company] to guard the secrecy of the information; (4) the value of the information to [the company] and [its] competitors; (5) the amount of effort or money expended by [the company] in developing the information; (6) the ease or difficulty with which the information could be properly acquired or duplicated by others." RESTATEMENT OF TORTS § 757 cmt. b (1939); see also Open Records Decision Nos. 319 (1982) at 2, 306 (1982) at 2, 255 (1980) at 2.
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